What started in the 2000’s with selling insurance as part of the online booking flow and a redirect referring customers to a hotel booking website, has turned into full retailing and in some cases even into a super app (think AirAsia) where selling seats is just one of the many services offered.
What’s (a.o.) the impact on payments of all these channels / touch-points, ancillaries and permutations?
☑️ More coordination and collaboration required between airline stakeholders, define a single payment strategy
☑️ Payment Orchestration is needed to harmonize and streamline the many processes, reporting and reconciliation
☑️ Becoming a retailer and offering a single check out also means B2B payments to (external) suppliers, in some cases in real-time (think VCN’s and A2A) 
☑️ Point of Sale (POS) touch-points require partner integrations, which come with specific requirements (EMV)
☑️ Data security and tokenization, especially when sensitive payment details are shared with suppliers, should be an integral part of the design of the payment infrastructure
☑️ Selling ancillaries as retailer (and ‘MOR’) makes the airline responsible / liable for any non-delivery of product / service by the supplier and the customer contacts, refunds and (fraud related) charge backs resulting from this
☑️ Ancillaries might restrict the available payment options for a booking, when doing a split payment at the time of check out, as the supplier also needs to support the same form of payment and currency
With airlines becoming retailers, they step into the shoes of OTA’s, which are basically tech companies that run sophisticated rules engines that decide in real-time on how and when to pay their suppliers, considering (a.o.) cash flow, conversion, fraud, costs, FX and rebate. Will be interesting to see if airlines can emulate this?
Acronyms used:
GDS – Global Distribution System
PSS – Passenger Service System
DCS – Departure Control System
PSP – Payment Services Provider
POP – Payment Orchestration Provider
MCP – Multi Currency Pricing (Provider)
3DS – 3D (Domains) Secure
ATO/CTO – Airport / City Ticket Office
FFP – Frequent Flyer Program
NDC – New Distribution Capability
MMB – Manage My Booking
BSP – Billing & Settlement Plan (IATA)
ARC – Airlines Reporting Corporation
IFE – In-flight Entertainment
NFT – Non Fungible Token